India's Reserve Bank keeps monetary policy unchanged

The marginal standing facility (MSF) rate also remains unchanged at 4.25 per cent.

The MPC also decided to continue with the accommodative stance as long as necessary to sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.

On the basis of an assessment of the current and evolving macroeconomic situation, the RBI has retained the projection of real GDP growth for 2021-22 at 10.5 per cent consisting of 26.2 per cent in Q1, 8.3 per cent in Q2, 5.4 per cent in Q3 and 6.2 per cent in Q4.

Turning to the growth outlook, the MPC noted that the supply side pressures on inflation could persist. It also noted that demand-side pull remains moderate. While cost-push pressures have risen, they could be partially offset with the normalisation of global supply chains.

"On imported inflation from global commodity prices, urgent concerted and coordinated policy actions by Centre and States can mitigate domestic input costs such as taxes on petrol and diesel and high retail margins. The renewed jump in COVID-19 infections in certain parts of the country and the associated localised lockdowns could dampen the demand for contact-intensive services, restrain growth impulses and prolong the return to normalcy.

"In such an environment, continued policy support remains necessary. Taking these developments into consideration, the MPC decided to continue with the accommodative stance as long as necessary to sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward," the RBI statement said.

Fibre2Fashion News Desk (RKS)